The Central Provident Fund (CPF) is a comprehensive social security system in Singapore that aims to help individuals save for their retirement, healthcare, and housing needs. It is mandatory for all Singaporeans and Permanent Residents (PRs) to contribute to their own CPF accounts, with employers also contributing on their employees’ behalf.
The CPF retirement scheme is divided into three accounts – the Ordinary Account (OA), Special Account (SA), and Medisave Account (MA). The OA can be used for housing, education, and investment purposes, while the SA and MA are meant for retirement and healthcare respectively. With regular contributions from both the employee and employer, the CPF retirement scheme offers a steady and secure source of income for retirees in Singapore.
When a CPF member reaches the age of 55, their CPF savings will be transferred to their Retirement Account (RA), which earns a higher interest rate. They can then choose to withdraw a portion of their CPF savings or leave it in their RA for monthly payouts during retirement. Additionally, the CPF LIFE scheme was introduced in 2009 to provide CPF members with a lifelong monthly payout after they reach the age of 65.
It is crucial for all Singaporeans and PRs to have a good understanding of the CPF retirement scheme, as it is a key component of their financial planning for retirement. By